Maryland Deeds Attorney
For many people, one of the first times they interact with a lawyer and are exposed to legal terminology is when they purchase their first home.
Whether you’re buying real estate for the first time or are a seasoned homeowner, you’re likely to hear references to “deeds” during the closing process. But what exactly is a deed, and what should you know about them?
Title vs. Deed
First, let’s talk about using the right terminology. Most people assume that property deeds and titles are the same thing, and they use the terms interchangeably. However, deeds and titles are different legal concepts. When you own a property entirely, you will possess both the deed and title. But a title is distinct from a deed.
Holding title to a piece of property is the legal way of saying you own the right to the property. In contrast, deeds are legal documents (also called instruments) that transfer title from one person to another.
Deeds: An Overview
Most people know that a written document is needed to transfer title of a property from one person to another. But what you may not know is that deeds can be complex and nuanced and take multiple forms. There are several types of real estate deeds used to convey property. We will discuss the three most common:
- general warranty deeds,
- special warranty deeds, and
- quitclaim deeds
An experienced real estate attorney can help you determine which kind of deed you need, but regardless of the type of deed used, to be enforceable, it must …
- state on its face that it is a deed,
- accurately describe the property being transferred,
- be validly signed (executed) in presence of witnesses, and
- be delivered by the seller (grantor) to the buyer (grantee)
General and Special Warranty Deeds
Both general warranty deeds and special warranty deeds can be used for real estate sales where ownership of a property is transferred from the seller to the buyer with certain guarantees against future problems, such as fraud or someone else claiming they really own the property. Both general and special warranty deeds will contain the following information:
- The seller has title to the property and is legally allowed to sell the property.
- The property has not already been sold.
- There are no other claims on the property (such as liens or debts) other than those described in the deed.
- The seller must give a warranty that the title is free of any defects or encumbrances and that they will defend the title against all claims and compensate the buyer for any unsettled debts or damages.
The difference between a warranty deed and special warranty deed is the extent of the coverage of the warranty. A warranty deed provides guarantees that cover the property’s entire history. Whereas, a special warranty deed covers only the time the seller owned the property.
Just like a warranty deed, a quitclaim deed is an instrument that conveys the grantor’s title, interest, or claim to a piece of property to another party. However, a quitclaim deed (sometimes called a non-warranty deed) does not make any representations or guarantees as to the validity of the grantor’s title, interest, or claim. In other words, a warranty deed protects the grantee from title disputes, while the quitclaim deed does not.
While both types of deeds serve the same general purpose of conveying property, they are very different documents that have differing advantages and risks, which means it is important to work with an experienced real estate attorney to pick your type of deed wisely.
One advantage of quitclaim deeds is that they are simpler than warranty deeds and thus are popular when transferring property between family members where no money is changing hands. Examples of common scenarios when a quitclaim deed is used include:
- Parents transferring ownership of their home to their children
- Spouses transferring property between each other during a divorce
- Adding a new spouse to the title after marriage
- Estate planners using it to transfer property into a trust or to an heir
Quitclaim deeds are efficient at transferring ownership of real estate from one person to another, but they have shortcomings and are not appropriate for all property transfers. Therefore, it is important to work with a knowledgeable real estate attorney to help you choose the kind of deed that’s right for you.
Whether you are a real estate buyer or seller, Lusk Law, LLC offers a full range of real estate legal services. Contact our office if you need advice regarding your real estate law needs.
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